J.P. Morgan upgrades Genmab on cancer drug growth potential

J.P. Morgan upgraded biotechnology company Genmab A/S to "overweight" from "neutral" and raised its price target to DKr3,500 from DKr2,050, saying it expects positive November results from a late-stage trial of Genmab’s head and neck cancer drug petosemtamab.

The brokerage expects the interim result to show a response rate (ORR) of at least 40% in first-line head and neck cancer patients, versus 17% for Keytruda alone in the earlier KEYNOTE-048 Phase III trial. It said the statistical hurdle is closer to a response rate in the low 30s.

The readout covers about 300 of an initially planned 500 patients. A 63% response rate seen in 45 patients in an earlier Phase II trial is likely to fall, J.P. Morgan said, because the sample is six times larger, the response rate among HPV-positive patients may be lower and oral cavity patients may make up 10 percentage points less of enrolment.

It raised its peak sales forecast for petosemtamab to $5 billion from $2.5 billion, assuming a bigger share of the head and neck cancer market, citing the drug’s 28-month median overall survival in the Phase II trial and a progression-free survival advantage over key competition. 

It forecasts $3.5 billion from head and neck cancer and $1.6 billion from colorectal cancer, where data is expected in 2029.

For Rina-S, it raised its peak sales forecast to $4 billion from $3.4 billion, largely reflecting Phase III efficacy in second-line PROC patients on both progression-free and overall survival. 

For Epkinly, it raised its first-line DLBCL peak sales forecast to $2.5 billion from $1.4 billion, reflecting a 51% progression-free survival benefit at the interim analysis. Detailed data is due at the ASH meeting on Dec. 12-15.

J.P. Morgan raised its 2026-2030 revenue forecasts by 3-17%, reflecting higher Epkinly 2030 sales of $2 billion, from $1.3 billion, and a Rina-S peak sales forecast of $1.1 billion by 2030, from $0.7 billion. Its 2027 adjusted earnings per share forecast rose to $15.48 from $11.38.

Risks include a failure of the petosemtamab Phase III trial and faster competition in PROC and head and neck cancer that could cut peak sales.